A recent lower court case confirms the risks to commonly managed private equity funds when they collectively own directly or indirectly 80% or more of certain operating companies. On remand from the First Circuit, the District Court for Massachusetts held private equity funds managed by Sun Capital Advisors, Inc. (Sun Capital) liable for ERISA withdrawal liability owed by a bankrupt portfolio company to a multiemployer pension plan. The First Circuit’s decision in Sun Capital Partners III, LP v New England Teamsters and Trucking Industry Pension Fund, 724 F.3d 129 (1st Cir. 2013), cert. denied, 134 S. Ct. 1492 (2014) and the District Court’s application of the principles set forth by the First Circuit break new ground for determining withdrawal liability under the Multiemployer Pension Plan Amendments Act (MPPAA). The decisions also establish a roadmap for minimizing risk.